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A firm with separate marketing, finance, and production units is departmentalized on which basis?
AFunctional, based on the primary functions performed
BProduct, based on the goods that the unit produces
CCustomer, based on the buyer that the unit serves
DProcess, based on the production steps performed
Answer & Solution
Correct answer: A. Functional, based on the primary functions performed
1. Marketing, finance, and production are primary business functions.
2. Grouping units by the primary functions performed within them is functional departmentalization.
3. Product, customer, and process departmentalization group by output, buyer, and production step instead.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 7 "Designing Organizational Structures", section 7.1 Traditional Structures_
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